Bitcoin (BTC) showed reduced recent price variation in an Oct. 20 market reading, as its daily Bollinger Band width ranked among its smallest in 2½ years.
Bollinger Bands track how far prices sit from a central average. The observation concerned the daily version of the indicator, which typically uses 20 days of price history.
In the standard calculation, the middle line is a simple moving average. Upper and lower lines sit two standard deviations from it. Standard deviation measures the spread of prices around an average, so the distance between the bands contracts when recent prices are less dispersed.
The narrow gap describes the period covered by the calculation. It does not identify a price Bitcoin must cross to confirm a new move or establish when a larger move might occur.
Tight bands have preceded price moves before, but those moves can go in either direction. Later daily readings will reflect any change in price variation; the Oct. 20 reading alone gives no indication of what those readings will show.
